debts life insurance policies
\nNew billing and additional payment<\/p>\n
The BGH judgements of 12.10.2005 (Az. IV ZR Consumer protection allegations<\/p>\n For many years, insurers’ billing practices have been in the crossfire of criticism, Liability of intermediaries<\/p>\n Experts say that more than half of all life insurance policies were issued before expropriation of the insured<\/p>\n From the protection of property by the Constitution, also from the freedom of action Repayment of acquisition costs to insurance customers<\/p>\n Acquisition costs are usually distribution costs – depending on the contract and the company, 15 million contracts affected<\/p>\n The BGH believes that 10 – 15 million contracts could be affected by its rulings. New lawsuits – unresolved problems<\/p>\n Also by the jurisdiction of the higher courts it remains for the consumer as a rule Fallacy of the BGH<\/p>\n The BGH apparently assumes – as do most customers, by the way – that the fair value Risk of action by the insurers<\/p>\n But what is the current value of a contract? In any case, this also requires a Financial mathematics and court logic<\/p>\n Blatant violations of the laws of reasoning in judgments may preclude decisions before the Control is important<\/p>\n Insofar as one does not trust the insurer to calculate the surrender value correctly and transparently (finanztip.de)<\/p>\n
\n162\/03, 177\/03, 245\/03) and the
\nConstitutional Court with its decision
\nof 26.07.2005 (file no. 1 BvR 80\/95<\/a>)
\nmassively influence the contracts of the
\nLife insurers and the
\nBilling practice for an existing
\nLife Insurance. The BGH is in the process
\nin the opinion of the authors, a
\nfrequent fallacy about the calculation
\nof the surrender value. The
\nHope for additional payment should arise with
\nmost life insurance policies cancelled in the early years as a
\nprove to be unfounded, because the BGH stipulation contradicts the statutory regulations
\nand therefore unlikely to hold up in constitutional court. On the other hand
\nalready from the legal regulations nevertheless the chance on increased
\nSurrender Values.<\/p>\n
\nand this not only because the lobbying of the financial groups in their favor
\nhave pushed through numerous legal facilitations.
\nAlready years ago a judgement was passed (Az. 74 047\/83, LG Hamburg) which allowed
\n“Life insurance for retirement is legal fraud.” to speak out. Those who have their
\nlife insurance policy after only about two years, had to realize that
\nthe surrender value is “zero”. The premiums paid were in particular
\nAcquisition costs (sales costs incl. broker commission) and a lapse deduction
\ncharged. Factually, the money wasn’t gone – it had just been (kept) by someone else.
\nThe courts apparently didn’t want to leave it at that.<\/p>\n
\nThe agreement may be terminated upon reaching the original term of the agreement. Increase pro rata temporis
\nthe acquisition costs, because the commission remains the same amount.
\neven if the contract period and thus the payments of the customer at the end much
\nare lower. The liability of the financial advisor for incorrect advice can be
\nThis may also be the case if the brokerage fee or commission is immorally too high.
\nBanks and insurance brokers like to combine life insurance at the
\nFinancing with a fixed-rate loan – especially for home construction financing has
\nthis results in considerable economic disadvantages. Finally, the
\nexperience shows that paying off one’s own four walls takes ten years longer and costs more.
\nmore than with an annuity loan: Many a builder-owner has lost
\nAdditional burdens his home in a foreclosure auction. Also these so-called
\n“Interest rate inflation or leverage transactions” have been a hang-up for years, intermediaries to the
\ndamages.<\/p>\n
\nwith protection against unequal bargaining power, the Constitutional Court concluded,
\nthat by the end of 2007 the legislator will have introduced a statutory regulation on the participation of the
\nInsureds in factually existing, with insurance premiums acquired
\nassets of the insurer. In practice, insurers can
\nwrite off their securities and real estate under commercial law – the insurance customer
\nis then insufficiently involved in it. The so-called “cross-charges” of the
\nInsurers are not transparent. Insurance supervision protects the
\nInsurance customers not sufficiently protected from disadvantage.
\nRepayment of the lapse deduction to insurance customers
\nIn the opinion of the Federal Court of Justice, clauses concerning the cancellation deduction, i.e.
\nTermination costs (“penalty fee”), not transparent enough and therefore ineffective.
\nConsumers could therefore (even in the case of contracts that have long since been terminated) have it checked whether
\nthe insurer still has to pay something in addition.<\/p>\n
\nalso depending on whether it is a foreign or domestic insurance, the
\nAcquisition costs can be 7% or significantly more. These costs were generally offset against the
\nPremiums from the first two years of the customer’s premium payment are offset.
\nThe BGH has put an end to this practice and, by judicial interpretation of the contract
\nstipulated that the insurance customer must normally pay at least about just under the
\nto get back half of his paid-in contributions in the event of cancellation
\n(Rule of thumb). This means that even in the case of already terminated and
\noften generate additional substantial losses in the individual case.
\nBack payments.<\/p>\n
\nWhen the legislator (until the end of 2007) will make a regulation is open – the
\nInsurance industry now has the task for future contracts “transparent”, i.e. for
\nto develop clauses that are comprehensible to the consumer from the outset. Thereby
\nthe requirements of the Constitutional Court must also be taken into account.
\nCheck company pension scheme
\nThe labor court Stuttgart (Az. 19 Ca 3152\/04<\/a>) went in its judgement of 17.01.2005
\none step further: according to this, employees have the right to a salary conversion
\nnot to accept any burden with acquisition costs at all!
\nHere the employee is protected even more than the “normal” insurance customer,
\nbecause the employee is always entitled to a surrender value calculated from the
\nTotal premiums paid – without deduction of acquisition costs, brokerage commission
\netc. This affects employers with deferred compensation models for the
\nEmployees.<\/p>\n
\nnot spared, the recalculations of the insurers expertly by a
\nto be examined by an expert. Especially since there is “even more in it” for the consumer than
\nso far judged, because it is the current value that matters by law.
\nIf the clauses are invalid, the law takes effect – in this case \u00a7 176 VVG<\/a> in the event of termination (and
\n\u00a7 174 VVG<\/a> in the case of premium waiver). This states that the surrender value of the current value
\nof the contract. Deductions (cancellation deductions) may then be made from this fair value.
\nbe made, insofar as these are agreed and reasonable. The BGH now states
\nfinds that these deductions have not been validly agreed.
\nWhether this is the case remains to be seen. If the BGH bases this solely on the lack of
\nTransparency of the clause on offsetting acquisition costs by Zillmerisation
\nthis would actually be irrelevant for the agreement of the cancellation deductions,
\nbecause the cancellation deductions have nothing whatsoever to do with the zillmerisation of the acquisition costs.
\ndo. Rather, Zillmerization is already required prior to the deduction of the reversal deductions from the
\nsurrender value included in the calculation of the fair value.<\/p>\n
\nis derived from the premiums paid after deduction of costs, including acquisition costs.
\nand taking into account interest and risk contributions. So like the
\ndevelopment of a savings account – this is called a retrospective
\nCalculation.
\nHowever, the Insurance Contract Act (VVG) provides for a current value calculation, and the
\nThe actuarial assumptions are made prospectively, i.e. on the basis of the insurance benefits promised and the
\ncontributions still to be paid. As a simple example, without further cost
\nexcluding acquisition costs and interest – are explained. If the contract stipulates that 20
\npaid EUR 1000 per year in contributions for years and received EUR 18,000 in the end
\nbecause – no matter how non-transparent and whether agreed at all – the first two
\nannual premiums have been offset against the acquisition costs – then the customer receives after
\n2 years a surrender value – current value – of 0 EUR, although he paid 2000 EUR.
\nhas. The BGH now believes that this deduction from the 2000 EUR paid is inadmissible because
\nthe deduction of acquisition costs is not agreed transparently.
\nBut this is not the point: according to the law, the surrender value is calculated as follows
\nnamely, time value. And that means: from the agreed performance in the amount of
\n18,000, the contributions still to be paid for 18 years – also 18,000 EUR
\n– so that the fair value is EUR 0. These 0 EUR are at the same time
\nthe so-called zillmerized actuarial reserve – EUR 2000 is the zillmerized
\nClosing costs.
\nThat this result is ultimately due to the offsetting of acquisition costs,
\nmust be determined in accordance with this legally compliant method of determining the surrender value\/
\nThe current value, however, must not be explained or otherwise agreed at all. Any
\nThe statement that acquisition costs will be charged would have been purely descriptive.
\nCharacter without immediate effect – it is not needed for the result. The
\nInvalidity of a clause describing this circumstance is therefore completely irrelevant;
\nthe statutory provision alone is sufficient.<\/p>\n
\ndiscount rate to be taken into account. The fair value of, for example, a non-contributory
\ncontract, which provides for a benefit of EUR 100,000 over 20 years, is by no means
\nat the present time already EUR 100,000. The insurers discount here with the
\nActuarial interest rate of the contract, i.e. 4%, 3.5%, 3.25%, 3% depending on the start of the contract
\nor 2.75%. This means that a non-contributory contract that pays out EUR 100,000 in 20 years has
\nbenefit, a present value of, for example, EUR 45,639 (at an actuarial interest rate of 4 %), or
\nEUR 58,125 (at 2.75 % actuarial interest).
\nWhether these sharp differences are justified depends on whether perhaps from
\nother sources – e.g. through interest on surplus – are still compensated. Because without
\neach additional surplus is EUR 100,000 paid in 20 years, today
\nthe same value and do not depend on the interest rate at which the insurer
\n…has done the math. Even in the case of a zero bond that matures in 20 years at EUR 100,000
\nthe current market value does not depend on when the bond (fixed-income security) is to be redeemed.
\nwhich interest rate was originally issued, it is rather discounted with
\na uniformly determinable capital market interest rate today.<\/p>\n
\nConstitutional Court vulnerable, because logic is part of the
\nconstitutional legal order. In particular, consumers with
\nthe current market value according to the fair value model with the help of an expert.
\nInsurance Contract Act (VVG) and calculate it in advance, in order to be able to
\nto achieve additional payouts in the event of early termination of the contract.
\nBut if the insurers vis-\u00e0-vis the BGH this statutory
\ncalculation method would have been too much in the field, the very question of the
\nadequate calculation of a fair value emerged. And that would make the clearly
\ndeterminable and usually used – but in principle not at all always
\nthe starting point “zillmerised actuarial reserve”, which is clear from the law
\nwould have had to be questioned. However, in view of the current
\nThe capital market situation could be even more disadvantageous if insurers were to take out contracts with
\nz. e.g. 4 % actuarial interest rate, the surrender value\/time value is no longer calculated at 4 %, but at
\ncalculate a capital market interest rate of perhaps soon only 3% or less
\nwould have to.<\/p>\n
\nto have calculated, one can have its calculations done by an independent
\nby a mathematical expert. This does not initially require
\nLawsuit. But the insurance customer must, even in the case of long ago settled or
\ncancelled contracts, with the insurer a new settlement first of all
\nif he doesn’t want to give up his good money.<\/p>\n